Threat of Cyber Increasingly a First Party Risk

Are you aware that most of the first party cyber incidents have created greater financial impact to companies than just a breach of Personally Identifiable Information (PII)?

Recent events have demonstrated that Operational Technology is becoming an increasing target for cyber criminals. This means the probability of business interruption due to cyber criminals is on the rise. They are trying to enter business systems and disrupt or halt production, or cause actual physical damage to tangible assets.

The recent international cyber attack at Merck was so massive that it may lead to changes in how cyber risk is managed, transferred, and insured in the insurance market in 2018. Merck recently announced large third-quarter financial loss due to the temporary production shutdown that the company attributes directly to the June 2016 Petya/NotPetya virus. The potential for a single cyber attack to negatively impact the daily operations and profits of a company has never been higher. Lockton anticipates a continued focus on cyber risk in the first party space and an increased opportunity to transfer risk through emerging first party-driven cyber products, which may help provide broad first-party insurance coverage for loss or damage to company property, inclusive of data, and any resulting time element loss.

Read more here about how cyber risk is evolving beyond PII to include property damage and business interruption.